According to CBRE-EA, vacancy rates
fell to 13. 4 percent during the third quarter
of 2015 in downtown and suburban markets. Vacancy rates haven’t fallen to this
level since the mid-2008. Also, 807,000
new office jobs were created last year,
accounting for nearly 29 percent of all
nonfarm jobs.

Hotels

Hitting bottom in 2010, hotel construction
rebounded 240 percent ( 58 msf ) through
2014. In the first nine months of 2015, starts
rose another 13 percent with value gains of
17 percent. By year’s end, growth should
stand at 18 percent ( 6 msf ) and 22 percent
in dollars ($13.9 billion). Growth in 2016 is
forecast at 4 percent ( 71 msf ) and 6 percent
($14.7 billion) as business and leisure travel
is projected to sustain this sector’s moderated momentum. This slower growth is
indicative of another maturing market
after five years of consecutive gains (see
Figure 23).

Eleven projects (at least $100 million
each) broke ground in the first nine months
of 2015. They represented a total of $2.1 billion, an increase of 47 percent from 2014.
In dollar value, the year’s largest project
was the $400 million expansion of the
Westin Ka’anapali Ocean Resort Villas in
Lahaina, Hawaii. The $342 million Resorts
World Hotel in Las Vegas was second.

Institutional—A new day takes shape

Last year saw the continued return of
public-sector financing. Nearly two-thirds of
financing comes from federal, state and local
governments (see Figure 24). In a recovery
begun in 2014, institutional building pulled
positive in 2015 for the first time in seven
years. In 2014, starts grew 7 percent (305
msf ) and 13 percent in dollars ($104 billion).
Last year, starts grew an additional 2 percent (312 msf ) and 6 percent ($110 billion).
In 2016, positives will reach 8 percent (327
msf ) and advance 9 percent ($120 billion).

Education

When the effects of the recession really
hit in 2009, public financing dropped
off. Steep declines in educational building starts continued through 2013, an
especially rough year. At that time, starts
were 59 percent lower from 2001’s peak.